Food & Grocery Retailing

1. SITUATION ANALISIS:

In India we are starting from our first range of stores in New Delhi. We are here in India with a brand new format and model of differentiated marketing.

What direction do we take?

From our present movement we have an aim of achieving the number 1 position in food and grocery store and maintaining that position in the coming future.

Analyzing the technical, legal and government policy changes.

Internet presence:

One of the obvious uses of the Internet is the selling of products and services. It is common for Internet providers to make wild claims about the Internet's potential; through Tesco's Internet service we can have access to millions of customers. Products and can be sold 24 hours a day for ordering for the next day. And since transactions are handled electronically, sales and distribution can be done much more cost-effectively.

We had conducted a research before counting on the Internet presence for Indian market. And our research indicates that consumers use tangential information about a firm in their judgment of the overall quality of the firm. Consumers may use the size and characteristics of a retail store as a signal of its quality. That is, the physical "presence" of the store provides information to the consumer about the store that is above and beyond the overt information provided by the retailer. It is logical to assume that consumers view a large and/or plush store as having a lot of permanence and thus will likely be around to stand behind the items purchased in the store. Thus, investment capital is important in establishing a successful retail store.

Introduction of RFID technology:

In our tesco outlets in India it's applied to pallets, cases and cartons of merchandise. Here RFID will cut warehouse and distribution costs-some 3 percent to 5 percent of our revenue. In our tesco outlets we have such an arrangement where RFID readers placed throughout warehouses will pick up signals from tags without the need for a human to point a scanner at the tag, which is the way it's currently done with bar codes. This will enable us to reduce warehouse and distribution center staff.

Computerized receipts and payment system:

What makes Tesco's retail technology group different? First, we rely on it ourselves to support our own extensive network of retail stores and extend the very same capabilities and unparalleled quality of service to our grocer customers. Second, our formidable purchasing scale and commitment to delivering solutions to minimize our customers' ongoing capital investments give grocery retailers "industrial strength" systems, security and reliability, and cost savings typically out of reach of most independent retailers. Plus, our operational consulting expertise takes us far beyond the role of just technical consultants, giving us the ability to translate new technology to a unique business situation.

Tosco's retail technology services are comprehensive, addressing every point where technology touches operations.

That includes the following:

 Electronic payment services

 Electronic pricing support

 Labor management and scheduling technology

 Computer network

 Gift card programs

 Computerized storing system.

Government restrictions in India and zoning system in Delhi:

The government decision on January 24 allows up to 51 percent foreign direct investment (FDI) in "single brand" retail stores. Nike, Nokia or Levi can establish stores, but multi-brand retailers such as Wal-Mart and Carrefour are excluded.

Commerce and Industry Minister Kamal Nath announced the changes before flying to the World Economic Forum conference in Davos in late January where Indian business and government officials touted for increased foreign investment. Nath told the leaders of the world's richest corporations that India was seeking to increase its FDI to $US10 billion by 2006-2007, up from the $6.5 billion invested in 2005.

COMPETITIVE RIVALRY

Subhiksha: DISCOUNT retail chain Subhiksha is planning a mega expansion. The Chennai-based chain is mulling entry into the Delhi and Mumbai markets next year, by when it plans to invest up to Rs 150 crore in establishing 180 new stores.

It will be expanding in the southern region as well, with new stores in Bangalore and Andhra Pradesh. Subhiksha closed last fiscal with sales of Rs 278 crore, and is targeting the Rs 500-crore mark in 2005-06.

Mr Subramanian said that while entering the Delhi and market, special emphasis would be laid on presence in mid-market areas instead of posh markets. "We will not take Subhiksha to South Extension, for example,but to Sarojini Nagar, Janakpuri areas.

Reliance Fresh: The neighbourhood format has been designed keeping the needs of homemakers in mind and stocked with a wide variety of vegetables, fruits, eggs, dairy products and groceries and priced competitively, RIL President and CEO (Operations and Strategy) Raghu Pillai said in Andheri interview with a leading financial daily.

The rollout of Reliance Fresh would be followed by other formats -- a nation-wide chain of hypermarkets, supermarkets, discount stores, department stores, convenience stores and specialty stores at an investment of more than Rs 250bn in the next five years.

Namdhari:

Food world:

A pioneer in the business of Organized Retail in India, Foodworld, the Rs.300 crore company part of RPG Group, is the first national chain of supermarkets.

It provides customers with a wide range of quality products at a reasonable price all less than one roof, in a convenient location, in a clean, bright and functional ambience. Part of self-service format Foodworld follows the service of clearly marking on the shelf, relevant details of the product displayed, including the name, gram mage and price. This provides immense convenience to the shopper.

Foodworld started as a division of Spencer & Co, a part of the RPG Group,